International Financing Expert for the Consulting Services for “Access to Financial Services (PMIC Solar)”

Background

Access to reliable and safe energy is understood to be a prerequisite for sustainable development. Over the last decade, access to energy in Pakistan has been below 72% of the overall population, where at the same time the rural population has been experiencing sinking levels in access to energy. This lack of access to energy constitutes a hindrance to the further social and economic development of the population living there. These points have already been acknowledged by most of the related entities and so a lot of work has already been conducted to enable further access to energy for domestic and commercial users. The work conducted so far has in part led to a higher degree of energy supply overall. Nevertheless, several gaps in electrification in rural and also peri-urban areas in Pakistan still persist and it remains unclear in how far these gaps will be closed in the future.

Solar Home Systems (SHS) provide a certain amount of reliable electrical energy by transforming sunlight into electricity and storing this electrical energy until it is needed. The energy generated can be used for lighting, communication, refrigeration, or other purposes. SHS have a lifetime of several years, so buying an SHS means buying the energy supply for several years and having to pay the relevant cost upfront. In many cases this upfront cost is too much for an average household to pay while this same cost could be affordable if it were stretched over the years of operation of an SHS. Thus, financing solutions that make the purchase of an SHS possible for many households is required. This financing provided through Micro Financing Institutes (MFIs) or Micro Finance Partners (MFPs) can enable a much larger customer base for SHS to purchase such systems and to thus benefit from the reliable energy supply provided by SHS.

The development of SHS over the past decade has picked up considerably with respect to the scale at which components for SHS are being produced which has further brought down the cost of these components. Further quality frameworks that cover important topics such as truth in advertisement, interoperability and safety of these systems have been put into action with quite some success and have now been integrated into international standards. A further development has been component-based SHS (CB-SHS) that are designed and sold by vendors without a certification of each system but rather by vendors that are certified and whose performance is evaluated on an ongoing basis.

The Pakistan Microfinance Investment Company (PMIC) has established a program for the support of financing of SHS through MFIs/MFPs that aims to increase access to energy for households in poor grid mostly peri-urban areas and off-grid locations in the rural areas of Pakistan - by enabling a sound supply of quality solar products from private solar supply companies, and by triggering demand from households for solar products and solar financing (PRIME). PMIC has further begun financing of CB-SHS with particular short-listed partner organizations. For this PMIC has prepared a Quality Framework for CB-SHS and is looking to begin implementation of this program. Considering that the Quality Framework for CB-SHS has so far not been tested one major task of the Assignment shall be reviewing the relevant documents and proposing changes that appear appropriate.

Objectives:

The main Objectives of the Assignment are:

• To ensure Program implementation in compliance with the Program agreements by improving/establishing ESMS, technical and quality audit system, monitoring, verification, pipeline building and reporting systems in PMIC among other.
• To ensure that PMIC complies with KfW’s Simplified Direct Disbursement Procedure and Simplified Reimbursement Procedure.
• To enable PMIC and MFIs/MFPs through capacity building measures and organizational and procedural improvements to provide sustainable SHS financing to the target group.
• To enable PMIC in further adopting, refining, and implementing national and international Quality Standards.
• To enable vendors of solar equipment (also CB-SHS) to supply well-functioning and safe quality solar products and services to the target group.
• To increase and establish a sustainable demand from target households for solar products and solar financing, through outreach and support to actors in the value chain.